Allied Capital Commits $63 Million to Leading Distributor of RV Parts and Accessories

Business Wire, July 25, 2006

WASHINGTON -- Allied Capital Corporation (NYSE:ALD) announced today that it has committed $63 million to support the buyout of Stag-Parkway, Inc. by private equity firm Greenbriar Equity Group LLC. Allied Capital's investment took the form of senior secured unitranche notes.

Stag-Parkway ("Stag") is the largest distributor in the U.S. of aftermarket parts and accessories to the recreational vehicle ("RV") industry. The company links over 500 suppliers of RV parts and accessories to a customer base of over 2,000 independent RV dealers and distributors through a network of 16 distribution centers nationwide. Stag stocks over 15,000 SKUs and has access to another 10,000 SKUs through a special order service, giving it advantages over its competitors in purchasing scale, national coverage and high rates of order fulfillment. The company also provides inventory management and merchandising assistance to its large and diverse customer base.

"This deal presented a great opportunity for Allied Capital to invest in a market-leading company with national scale and reach," said Justin Maccarone, Managing Director of Allied Capital. "The company's profitable growth is evidence of its strong management team, its growing base of stable, aftermarket customers, and the favorable demographic trends in its industry. We are delighted to be partnering with Greenbriar Equity, which brings significant industry and managerial experience to this deal," he added.

"Allied Capital's ability to provide a one-stop financing package through a unitranche structure was a key factor in choosing them as our financing partner in this transaction," said Jill Raker, Managing Director of Greenbriar Equity Group. "Allied Capital's structural flexibility, efficient execution and ability to fund the entire debt capital needs of the transaction contributed to the successful closing of this deal."

Allied Capital was advised by King & Spaulding for legal counsel.

About Allied Capital

Allied Capital Corporation, a leading business development company with total assets of more than $4 billion, has paid regular, quarterly cash dividends to shareholders since 1963. Allied Capital invests in the American entrepreneurial economy by providing capital to companies seeking a long-term financial partner and access to managerial resources often unavailable to smaller companies. Since its IPO in 1960, Allied Capital has provided long-term debt and equity financing to thousands of middle market companies. In serving its shareholders, Allied Capital helps build middle market businesses and support American jobs. The Company's private finance portfolio includes investments in over 100 companies that generate aggregate revenues of more than $12 billion and employ more than 90,000 people.

Headquartered in Washington, DC, Allied Capital offers shareholders the opportunity to participate in the private equity industry through an investment in the Company's New York Stock Exchange-listed stock, which is traded under the symbol ALD. For more information, please visit www.alliedcapital.com, call Allied Capital investor relations toll-free at (888) 818-5298, or e-mail us at ir@alliedcapital.com. All media inquiries should be directed to Stan Collender of Qorvis Communications at (202) 448-3131.

About Stag-Parkway, Inc.

Stag-Parkway is the leading distributor of recreational vehicle ("RV") aftermarket parts and accessories, serving over 2,000 independent RV dealers and service centers through a network of 16 distribution centers throughout the U.S. Headquartered in Atlanta, GA., Stag maintains an inventory of over 15,000 SKUs in many product categories, including hitches, electrical components, plumbing, hardware, towing and general merchandise. The company also provides its large and diverse customer base with inventory management and merchandising assistance. Stag is one of only two national distributors in the RV aftermarket industry, and benefits from its scale in terms of purchasing power, national coverage and high rates of order fulfillment. Its focus on the aftermarket also provides it a stable and growing base of installed customers. For more information, please visit www.stagparkway.com.

About Greenbriar Equity Group LLC

Greenbriar Equity Group LLC is focused exclusively on making private equity investments in the global transportation industry, including companies in freight and passenger transport, commercial aerospace, automotive, logistics, and related sectors. Greenbriar's partners bring over nine decades of collective experience at the highest levels within transportation. Greenbriar manages $700 million of committed capital and co-investment commitments. Additional information may be found at www.greenbriarequity.com.

Forward-Looking Statements

The information contained in this press release contains forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements, and some of these factors are enumerated in Allied Capital's periodic filings with the Securities and Exchange Commission.